Dollar Down on Uncertainty

Unpredictable politics are unmistakably Dollar negative, but the last week has proven just how heavily it can weigh on the currency. Traders are rushing to hedge their exposure to a volatile political landscape by betting against the Dollar and are paying the highest premiums in over a decade to do so. Should that trend continue, the Dollar could hit its lowest level in four years.

Gold topped $5,000 an ounce yesterday, and could continue its run as Traders, primarily from central banks and sovereign wealth funds, slash their Dollar-denominated holdings and rotate into precious metals for protection against debasement amid uncertainty. Additionally, the risk of another government shutdown is looming as Democrats threaten to withdraw support from the current funding package should Republicans not withdraw funding for the Department of Homeland Security.

What to Watch This Week…

• Monex USA Online is always open

The complete Economic Calendar can be found here.

EUR ⇑

The Euro is up against the Buck this morning, having strengthened to its highest level since June 2021. The move is driven largely by broad USD weakness and Traders piling into the Euro as a safe-haven (when compared to the Dollar). These are very compelling levels for corporates to lock in hedges for the repatriation of their Euros into Dollars.

JPY ⇑

The Japanese Yen is up against the Greenback this morning

, reaching its best level in two months.  Rumors that the Bank of Japan intervened in the currency market over the weekend have been officially put to rest after the BoJ’s accounts showed no movement large enough to signal intervention. It does appear that there was another rate check performed this morning, although it is not clear currently if that came from the New York Fed again.